Dawood Hercules' net income drops by 25% YoY

October 28, 2019 (MLN): Dawood Hercules Corporation Limited (DAWH) has announced its financial results today as per which the company reported its net profits after tax at Rs 20.9 billion for the nine months ended on September 30th 2019. In the corresponding period last year, the company earned profits of Rs 28 billion, depicting a decline of 25.5% YoY.

According to its profit and loss statement sent to PSX, the earning per share for the period exhibited a massive decline of around 72% from Rs 29 per share to Rs 8.16 per share.

During the period, the topline of the company grew remarkably by 30% YoY on the back of fertilizers and petrochemicals performance. Whereas, the costs of sales surged by 32%. This led the gross profits to increase by  25% YoY. Besides, the gross margins shrank marginally from 31% to 30%.

Furthermore,  the company also witnessed a significant rise in its finance cost by 140% due to rise in interest rates during the period, also, income from other sources declined by 36 %, all of these further helped in declining company’s profitability.

The company also earned profits of Rs 1.16 billion from its associates and joint ventures against the loss of Rs 196 million reported last year which provided comfort to the earnings.

Alongside financial results, the board of directors of the company announced an interim cash dividend for the quarter ended September 30^th 2019 at Rs 5 per share i.e. 50%. This is in addition to interim dividends already paid at Rs 8 per share i.e. 80%.

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